Incident description

The company issued a business information announcement for the first half of 2024: In the second quarter of 2024, the company's operating power plants completed 5.833 billion kilowatt-hours of power generation, an increase of 3.12% over the previous year; completed a feed-in capacity of 5.543 billion kilowatt-hours, an increase of 3.32% year on year; completed heating capacity of 2.8466 million tons, an increase of 11.88% year on year.

Incident comments

Wind power has improved markedly with incoming wind recovery, and new energy performance is expected to increase year-on-year. Thanks to the improvement in wind, the company's wind power completed 1.15 billion kilowatt-hours of power generation in the second quarter of 2024, an increase of 19.87%; of these, onshore wind power completed 0.48 billion kilowatt-hours, an increase of 17.15% year on year, and offshore wind power completed 0.67 billion kilowatt-hours, an increase of 21.90% year on year.

Since the company has had no new land wind or sea wind installations since last year, and wind power prices in Fujian are stable and there are no marginal costs, it is expected that the growth rate of new energy performance in the second quarter will be higher than the increase in wind power generation. Driven by the excellent electricity performance of wind power in the second quarter, the company's wind power generation capacity was 2.646 billion kilowatt-hours in the first half of the year, up 0.65% year on year. Among them, offshore wind power completed 1.531 billion kilowatt-hours, an increase of 4.90% year on year, and onshore wind power completed 1.115 billion kilowatt-hours, a decrease of 4.66% year on year. From a structural perspective, it is expected that the company's new energy performance may maintain year-on-year growth in the first half of the year due to the increase in the share of offshore wind power with better profitability.

Coal prices fell and thermoelectric power increased year-on-year, and thermal power performance continued to recover in the second quarter. Since the beginning of the year, coal prices have declined steadily. In the second quarter, the average price of Q5500 coal liquidation at Qinhuangdao Port was 848.45 yuan/ton, a year-on-year decrease of 65.96 yuan/ton. The steady decline in coal prices has continuously released the pressure on the company's coal and electricity costs. In terms of electricity volume, the company's thermal power generation in the second quarter was 4.67 billion kilowatt-hours, a year-on-year decrease of 0.35%. However, from a structural point of view, thermoelectric power with excellent profitability completed the generation of 2.323 billion kilowatt-hours, an increase of 7.60% over the previous year, and completed heating supply of 2.8466 million tons, an increase of 11.88% over the previous year. Although coal power generation decreased by 14.04% year on year to 1.304 billion kilowatt-hours, due to the relatively low shareholding ratio of coal power and relatively weak profits, the excellent performance of thermoelectric power may dominate thermal power performance in the second quarter. In addition, the company's gas and electricity generation capacity in the second quarter was 1.043 billion kilowatt-hours, an increase of 3.22% over the previous year. According to the company's announcement, Jinjiang Gas and Electric will transfer 2.15763 billion kilowatt-hours of electricity per month to other power generation companies in the province at a price of 0.3906 yuan/kilowatt-hour (tax included) from April to December 2024. Compared with only transferring alternative electricity in September 2023, the second quarter of this year will begin to enjoy an increase in the company's profits from alternative electricity, which will further boost the company's performance. Overall, the company is expected to have an excellent performance position in the second quarter, driven by improvements in both new energy and thermal power profits.

The shareholder return plan has been introduced, and the level of dividends is worth looking forward to. The company proposed in the “2024-2026 Shareholder Dividend Return Plan” that during the planning period, the board of directors of the company can propose that the company pay mid-term dividends based on the company's current profit, cash flow and capital requirements, so there will be room for further improvement in the company's dividends.

Investment advice and valuation: According to the company's latest operating data, we adjusted the company's profit forecast. The company's EPS for 2024-2026 is 1.18 yuan, 1.27 yuan, and 1.40 yuan, respectively, and the corresponding PE is 9.89 times, 9.18 times, and 8.36 times, respectively, maintaining a “buy” rating.

Risk warning

1. The risk of non-seasonal increases in coal prices;

2. The construction progress of the new project falls short of the expected risk.